Claire Trevett: Financial nous among MPs not such a bad thing

Steven Joyce is the only MP who does not have a single superannuation scheme lodged under his name.

The accusation that a shoemaker's child goes barefoot could well apply to Minister of Economic Development Steven Joyce, who is so busy focusing on developing the economy he appears to have forgotten to develop his personal economy by signing up for Parliament's super scheme.

Joyce is the only MP who does not have a single superannuation scheme lodged under his name. His office has confirmed it is no oversight - he has none, so does not collect the generous subsidies of $2.50 for each $1 an MP puts into a scheme - worth up to $29,000 a year.

Admittedly, this is likely because Joyce's child is already well shod thanks to his previous life. He may well have decided he doesn't need the extra money, so won't bother claiming it. He may have decided it ran counter to National's aims of reducing public spending.

Whatever the reason, his decision runs counter to the natural inclination of many politicians.

There is a perception (not helped by the behaviour of some) that they see it as a challenge to wring every possible drop from their allowances and subsidies, driven partly by a competitive spirit and coveting thy neighbour's allowances, in case others get more.

It doesn't take much to get people frothing at the mouth over MPs' pay and allowances and feed the suspicion they are hiding things away. Keith Ng's project on politicians in the Herald this week has shown that, unveiling properties held by six MPs in their superannuation schemes which were exempt from disclosure in the Register of Pecuniary Interests, as well as assessing the value of the property holdings of MPs. The MPs who openly fronted on it came out looking the best.

Over the past week, a bit of a siege mentality set in as MPs ran the gauntlet of being asked about their super schemes, their Wellington apartments, the value of their property holdings, their backpay, their air points. It didn't help that they also had to put the MPs Remuneration Bill through its final reading on Tuesday, in which they baulked at handing over their travel entitlements to the Remuneration Authority. Nor will it help that their pay rise is due to be announced soon by the authority. At least that will ensure all the periodic outrage at MPs actually being paid will be over and done with.

Some MPs feel hard done by, admittedly with some justification. The most egregious perks have gone to such an extent that in some cases, MPs pay to work. Those still in Parliament can get rebates on international travel, but only for a work trip. It is hard to imagine any corporate demanding staff pay 50 per cent of their international flights for a work trip, even if they did stay on for a weekend at the end to have a look around. It's even more difficult to imagine the staff member in question agreeing to it and thinking they've got a good deal.

It would be quite justifiable to set up a system under which MPs, especially those in positions of importance in their caucuses, could get proper travel costs covered for some genuine work trips.

When it comes to super, MPs are also unique in that their super subsidies are taken off their salary when it is being set - it is against the law for other employers to deduct super contributions from a base salary. The reasons for the high super contributions are because the old Government Superannuation scheme provided an effective subsidy of 23 per cent, and because of security of tenure.

Some MPs get the chop after only a few years. The higher subsidy is designed to recognise that insecurity. That is also one reason many MPs opt to set up personal schemes so they can access that money, if needed, once they leave Parliament.

The six who had the properties in their super schemes may feel a bit picked on - after all, they get the same in super and accommodation allowances as their 26 colleagues who had disclosed their properties. The only real difference was that they had not disclosed theirs in the register, since the rules stipulated they should not. The National MPs blamed the Registrar for telling them not to disclose the properties. Most said they would have been happy to disclose it, but they didn't write the rules, and to take the issue up with the Registrar.

The new Registrar, Sir Maarten Wevers, pointed out in a diplomatic, oblique fashion that actually they did write the rules, which are set out in the Standing Orders after being decided on by the MPs on the Standing Orders Committee.

Put the motives to one side and look at it another way: as a test run of an MP's abilities managing the books. The fruits of a superannuation scheme investment could be used as a barometer of the MP's skills at economic management. Wealth is, after all, one measure of success.

One MP discussing the arrangement of putting a Wellington flat into a super fund admitted to wishing he had done the same, purely because it makes financial sense. The most frank conversation about the pros and cons of a personal superannuation scheme was with Labour's finance spokesman, David Parker, who admitted quite frankly that he suspected many opted for personal schemes because, like him, they were arrogant enough to believe they knew more about investing than anyone else.

Parker was one of those who had disclosed the assets in his scheme, including a property in Paraparaumu and various share parcels. After looking through that list he was re-evaluating his proficiency on a few of those investment choices, but wound up by saying he'd like to think he was astute enough to know how to handle his money himself. It was pointed out that the rest of us would like to think so too, if there was any chance he might one day be Finance Minister.

Therein lies the nub. If an MP cannot shoe his or her own child, how can he or she be trusted to shoe the nation's?

Claire Trevett is the New Zealand Herald’s deputy political editor and joined the Press Gallery in 2007. She began with the Herald in 2003 as the Northland reporter before moving to Auckland where her rounds included education and media. A graduate of AUT's post-graduate diploma in journalism, Claire began her journalism career in 2002 at the Northern Advocate in Whangarei. Claire has conjoint Bachelor of Law/ Bachelor of Arts degrees from the University of Canterbury.